The purpose of this paper is to establish whether there is a direct correlation between employee retention and the overall profit growth of an organization. The study utilizes 6 articles and explains how they relate to the problem or purpose.
The article on “Keep Your Turnover Low” by Todd Donnelly shows there is a relationship between retention and profits of call centers. This article explores some of the causes of high turnover in call centers which include; unfavorable working environment and dissatisfied work force. Donnelly (2012) explains that high turnover in call centers, has impacts on profits due to high operational costs. The author also, gives strategies to reduce turnover in order to reduce costs and increase the profits.
The article by Thinking Leaders on “Calculating the High Cost of Employee Turnover” is directly related to problem. This article shows that there are direct and indirect costs incurred by a company or an organization when a high turnover occurs. These costs include; exit interview costs, litigation costs, outplacement costs, hiring costs and human resource processing costs (Thinking Leaders 2011).
The article also shows high turnover can lead to decreased productivity hence reducing profit margins of a company. The article shows that high turnover leads to reduced profit margin of a company, hence showing the correlation between turnover and profit margin. Ways of retaining employees are mentioned in the article.
Article by Arnold Anderson on “A Turnover Rate’s Effects on an Organization” also is directly related to the topic. According to Anderson (2011), when an employee is fired or resigns, the organization is likely to be affected negatively. The author further explains that employee turnover affects the growth and productivity of an organization. Anderson (2011) also identifies the impacts of turnover, which include; high cost, loss of talent, loss of competitive edge and loss of identity or culture.
The article by Chris Young on “Employee Retention Strategies Drive Revenue Growth in Sears” shows there is a direct correlation between turnover and profit margins of an organization.
One of the key strategies the author discuses is employee satisfaction (Young 2007).The author also explains that, employee satisfaction and attitude play a crucial role in productivity and retention of employees thus affecting the profits of the company. Young (2007) gives a case study of Sears Company, to show how employee satisfaction had great impacts on the profits of the company. The article shows there is direct co-relation between retention and profit margin of an organization.
Article by David Ingram on “The Definition of High Turnover Rate” contributes to the topic of the relationship between employee retention and profit margins of a company. Ingram (2009) defines high employee turnover as employees leaving their jobs at a high rate. He further explains the employee turnover in different industries.
The author also explores ways of reducing employee turnover, so it directly contributes to the purpose of the study. The article explores ways of employee retention, which has direct impact on the profit margins of an organization. According to Ingram (2009) the key to employee retention is satisfaction.
The article by Ruth Mayhew on “How to Solve Employee Turnover Rate” shows there is a direct correlation between retention of employees and profit margin of a company. The writer highlights the importance of solving employee turnover to reduce the negative impacts on productivity of workforce. The article comprises of steps to solve employee turn over in order to keep a steady profit margin. The article is related to the purpose of the study (Mayhew 2011).
References
Anderson, A. (2011). Effective Communication and Organization. A turnover rates effects on an organization. Web.
Donnelly, T. (2012). Human Resources. Keep Your Turnover Low. Web.
Ingram, D. (2009). Calculate interest rates. The Definition of High Turnover rate. Web.
Mayhew, R. (2011). Managing Employees: Employees. How to solve Employee Turn over Rate. Web.
Thinking Leaders. (2011). Calculating the high cost of employee turnover. Web.
Young, C. (2007). Employee retention strategies drive revenue growth at Sears. Web.